How much profit does the company make? Derrick Industries processes cocoa beans that it purchases from farmers.Cocoa beans are processed in batches. A batch of cocoa beans costs $50to buy from farmers and $33 to process in the company's plant. Twointermediate products, cocoa butter and cocoa powder, emerge fromthe processing. The cocoa butter can be sold as is for $18 or processedfurther for $55 to make the end product premium cocoa butter, whichis sold for $108. The cocoa powder can be sold as is for $65 or processedfurther for $57 to make the end product refined cocoa powder, which issold for $108.How much profit (loss) does the company make by processing one batchof cocoa beans into the end products premium cocoa butter and refinedcocoa powder?O $(189)O $(4)0 $210 $23

Explanation of Batch: A batch in this context refers to a specific quantity of cocoa beans that are…

Answered: Derrick Industries processes cocoa…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 14E

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Heavenly Dessert processes cocoa beans into cocoa powder at a processing cost of $9,500 per batch. Heavenly Dessert can sell the cocoa powder as is, or it can process the cocoa powder further into either chocolate syrup or boxed assorted chocolates. Once processed, each batch of cocoa beans would result in the following sales revenue: 1(Click the icon to view the sales revenue amounts and additional information.) Has the president made the right or wrong decision? Explain your answer. Be sure to include the correct financial analysis in your response. Begin by completing the following incremental analysis to compare selling the cocoa powder as is with processing it further. (For amounts with a value of $0, make sure to enter "0" in the appropriate input box.) Sell as Cocoa Powder Sell as Chocolate Syrup Sell as Boxed Assorted Chocolates Revenue Less: Additional processing costs Net benefit…
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Tulsa Milling buys oats at $0.60 per pound and produces TPM Oat Flour, TPM Oat Flakes, and TPM Oat Bran. The process of separating the oats into oat flour and oat bran costs $0.30 per pound. The oat flour can be sold for $1.50 per pound, the oat bran for $2.00 per pound. Each pound of oats has 0.2 pounds of oat bran and 0.8 pounds of oat flour. A pound of oat flour can be made into oat flakes for a fixed cost of $240,000 plus a variable cost of $0.60 per pound. Tulsa Milling plans to process 1 million pounds of oats in 20X0, at a purchase price of $600,000. Requirements 1. Allocate all the joint costs to oat flour and oat bran using the physical-units method. 2. Allocate all the joint costs to oat flour and oat bran using the relative-sales-value method. 3. Suppose there were no market for oat flour. Instead, it must be made into oat flakes to be sold. Oat flakes sell for $2.90 per pound. Allocate the joint cost to oat bran and oat flakes using the relative-sales-value method.…
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34) Boney Corporation processes sugar beets that it purchases from farmers. Sugar beets are processed in batches. A batch of sugar beets costs $60 to buy from farmers and $19 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $30 or processed further for $29 to make the end product industrial fiber that is sold for $77. The beet juice can be sold as is for $51 or processed further for $33 to make the end product refined sugar that is sold for $77. What is the financial advantage (disadvantage) for the company from processing one batch of sugar beets into the end products industrial fiber and refined sugar rather than not processing that batch at all?
M & Z Creameries, Corp. process milk and sugar to make vanilla ice cream. They sell their ice cream in large one-gallon containers to schools, hospitals, nursing homes, and restaurants. Each batch produces 1,700 gallons of ice cream at a cost of $840 per batch. M & Z Creameries, Corp. sells the one-gallon containers for $23.00 each and spends $0.35 for each plastic container. M & Z Creameries, Corp. has started to determine the feasibility of adding chocolate and strawberries and sell pint-size portions at local supermarkets.Further processing of each batch of ice cream could produce 24,400 pint-sized portions. A recent market study determined a demand existed for this type of product. M & Z Creameries, Corp. could sell each pint-sized portion for $2.70. Additional packaging would cost $0.30 per pint, and the additional materials would cost $0.25 per pint. There would be no change in fixed costs.Should they continue to sell only one-gallon size containers of vanilla ice…
SEved Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 170,000 gadgets for $13.90 on the open market. Daffodil's variable costs are $7 per widget while the full cost is $11.45. Daffodil sells gadgets for $14.40 each. If Daffodil is operating at capacity, what would be the minimum transfer price Daffodil would accept for an internal transfer? Multinic Choice $7.40 $1.45 $13.90 $14.40
Winter Sports manufactures snowboards. Its cost of making 1,800 bindings is as follows in the data table. Suppose Livingston will sell bindings to Winter Sports for $14 each. Winter Sports would pay $1 per unit to transport the bindings to its manufacturing plant, where it would add its own logo at a cost of $0.60 per binding.
Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,000 bars) are as follows: Ingredient Quantity Price Cocoa 500 lbs. $1.40 per lb. Sugar 100 lbs. $0.50 per lb. Milk 250 gal. $1.60 per gal. Determine the standard direct materials cost per bar of chocolate.
Data table Milk Ghee, byproduct Production (in gallons) 580,000 13,000 Sales (in gallons) Selling Price per Gallon 556,800 $ 12,350 $ 1.00 0.60

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